The ferrous complex is reaching into the higher airs as the Ukraine bid charges the market:
There is nothing to support this fundamentally, as we see in steel lagging. Chinese property continues to deteriorate:
Property sales are terrible. Down 30% on the year along with starts. Funding for developers shows no turn at all:
There is no infrastructure surge sufficient to offset this in H1.
I now see the iron ore bid as part of the Ukraine crisis. It exports 35mt. It’s not much but enough in this crazed environment to matter.
But beware, if war comes to Ukraine and commodities blow off, it will be the precursor to a swift and brutal global recession panic for broader markets. If US and European imports from China come under question then I can’t see why iron ore would hold up.
Those buying iron ore today are implicitly assuming it is a safe haven.
Nothing could be further from the truth.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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